#BI­IS18 In­ter­view: Or­biMed Asi­a's Jonathan Wang on his up­bring­ing, de­cid­ing against a con­sult­ing ca­reer, blunt ad­vice for Chi­nese en­tre­pre­neurs, and more

Next week we kick off the first an­nu­al US-Chi­na Bio­phar­ma In­no­va­tion and In­vest­ment Sum­mit in Shang­hai, fea­tur­ing some of the lead­ing transpa­cif­ic news­mak­ers in bio­phar­ma who are blaz­ing new paths for­ward in glob­al drug de­vel­op­ment. The game has changed in Chi­na and to­day we’re bring­ing you an in­ter­view with one of the main play­ers, Jonathan Wang, the found­ing part­ner of Or­biMed Asia and #BI­IS18 fea­tured speak­er.

Wang opens up about his child­hood, mov­ing to NYC on $200 of bor­rowed cash, learn­ing un­der the leg­endary Er­ic Kan­del, de­cid­ing be­tween a ca­reer at McK­in­sey ver­sus one in ven­ture cap­i­tal, the sea change in Chi­nese drug de­vel­op­ment, and much more. It’s a very per­son­al in­ter­view and I en­cour­age you to read it through.

Af­ter Wang ob­tained his PhD in neu­ro­science from Co­lum­bia in 1995, he went on to pur­sue an MBA at Stan­ford. Wang has been with Or­biMed since 2007 with its Asia arm man­ag­ing around $1.1 bil­lion in PE/VC funds, with in­vest­ments in com­pa­nies like Zai Lab, the in­no­v­a­tive Chi­na-based de­vel­op­er helmed by #BI­IS18 chair­per­son Saman­tha Du.

Ed­i­tors at our part­ner Pharm­Cube con­duct­ed this in­ter­view in Man­darin, and End­points pro­vid­ed the trans­la­tion and edit­ing. If you’ll be in Shang­hai next week, there’s still time to reg­is­ter for #BI­IS18, where Jonathan Wang and many more lu­mi­nar­ies will be pre­sent­ing.

— Ar­salan Arif, CEO End­points News

Knock, and the door will be open to you: The path from child­hood to be­com­ing a top VC

Pharm­Cube: What was your child­hood like?

Jonathan Wang: I was born in the 60s to a bio­med­ical fam­i­ly. My late grand­fa­ther was a Chi­nese medic. I have stud­ied bi­ol­o­gy since I was 16, and my broth­er and his wife are both doc­tors.

When I was a kid, I felt par­tic­u­lar­ly lucky be­cause I heard from the ra­dio that our gen­er­a­tion was “born un­der the red flag, grow­ing in hon­ey.” It was on­ly af­ter (Deng Xi­aop­ing’s) eco­nom­ic re­form that I re­al­ized it was a lie — Chi­na was so poor then even sug­ar had to be ra­tioned, while peo­ple in de­vel­oped coun­tries were al­ready con­sum­ing sug­ar-free drinks to con­trol their weight.

In sec­ondary school, I chose to study sci­ence be­cause I heard the say­ing “A mas­ter of math, physics and chem­istry can go any­where with­out fear.” It wasn’t un­til I grew up that I re­al­ized this was al­so a lie — peo­ple who on­ly know math, physics and chem­istry tend to stay at the bot­tom of com­pa­nies as they can on­ly earn salaries with their tech knowl­edge; but to be­come a leader and a man­ag­er, one needs to know the mar­ket and be good at in­ter­act­ing with peo­ple.

I en­tered uni­ver­si­ty two years ear­ly and, hear­ing from the ra­dio that “the 21st cen­tu­ry is bi­ol­o­gy’s cen­tu­ry,” I chose to ma­jor in bi­ol­o­gy. But when we reached the 21st cen­tu­ry, I re­al­ized half of that is a lie — the first half of the 21st cen­tu­ry is the cen­tu­ry of in­ter­net, mo­bile phones and AI; bi­ol­o­gy might have to wait un­til the sec­ond half.

Look­ing back, a ma­te­ri­al­ly de­prived child­hood was an in­cred­i­ble gift of life, be­cause it es­tab­lished my firm be­lief that I must strike it out on my own, and al­lowed me to ap­pre­ci­ate how good life is to­day. Among those born in the ‘60s, there is a large group of “un­for­tu­nate yet for­tu­nate” peo­ple like me. They grew not be­cause they were born rich, but be­cause they were born poor; they found the truth not be­cause they were not fed “lies,” but pre­cise­ly be­cause they grew up in “lies.”

To­day I be­lieve no mat­ter where and when a per­son is born, s/he is lucky. Life is an in­cred­i­bly pre­cious ex­pe­ri­ence. A hum­ble back­ground is the best place to be­gin; start­ing from rock bot­tom — though it may mean be­ing anony­mous and fac­ing nu­mer­ous dif­fi­cul­ties — means no mat­ter how you go, you’re go­ing up.

PC: Can you talk about your ex­pe­ri­ence study­ing at Co­lum­bia Uni­ver­si­ty?

JW: When I grad­u­at­ed from uni­ver­si­ty, I want­ed to be­come the world’s best sci­en­tist. I thought the most mys­te­ri­ous and chal­leng­ing area in bi­ol­o­gy is study­ing how the brain works and what con­scious­ness is. So I went for a neu­ro­science PhD in the lab of Co­lum­bia’s Er­ic Kan­del. Er­ic was award­ed the No­bel prize in 2000 and is one of the pi­o­neers in this field. But I learned far more than sci­ence from him.

I came to New York with $200 I bor­rowed from my un­cle. I picked up an aban­doned iron­ing board on the street as my desk and learned Eng­lish on a pix­e­lat­ed tele­vi­sion, with cock­roach­es roam­ing all around my kitchen. But the fun­ny thing is I didn’t feel poor at all; on week­ends I even drank beer and ate wa­ter­mel­on with friends, hav­ing a whole night of fun with less than $10.

Pro­fes­sors at Co­lum­bia talked fast in lec­tures. Ini­tial­ly I un­der­stood al­most none of it, so I bit the bul­let and took out most of my sav­ings ($30 or so) to buy my first elec­tron­ic de­vice in the US — a small recorder. I at­tend­ed lec­tures in the morn­ing and lis­tened to the record­ings re­peat­ed­ly in the af­ter­noons and evenings, com­pil­ing them in­to notes. I had no prob­lems in lec­tures af­ter just one se­mes­ter. In ret­ro­spect, through­out my in­vest­ing ca­reer, the mon­ey I spent on that recorder had the high­est ROI.

My su­per­vi­sor Er­ic sur­prised me. I thought he would have crazy hair and stay up all night for ex­per­i­ments; turned out he had the best groomed hair in the lab, and nev­er did any ex­per­i­ments. He used his mouth, not his hands, as he was in charge of in­struct­ing and man­ag­ing 40-odd post-docs and three doc­tor­ate stu­dents, and then “sell” the re­search re­sults (pub­lish on first-class jour­nals, and ob­tain re­search fund­ing). In Er­ic I saw the im­por­tance of a leader.

Er­ic was more than a top sci­en­tist; he al­so built two com­pa­nies, one of which was sold and the oth­er went pub­lic. Back then, sci­en­tists cre­at­ing com­pa­nies was a new idea to me. Lit­tle did I know, among my con­tem­po­raries at Co­lum­bia were a few en­tre­pre­neurs who would make splash­es in Chi­nese bio­phar­ma to­day, in­clud­ing WuXi AppTec founder Ge Li, Ge­newiz founder Steve Sun, Mab­space founder Xuem­ing Qian, Peg­Bio founder Min Xu and EOC founder Xi­aom­ing Zou. I lat­er in­vest­ed in Ge­newiz, and be­came long­time friends with all of them.

The oth­er thing about Er­ic that sur­prised me was his car. To com­mend his promi­nent achieve­ments, Co­lum­bia re­served a ded­i­cat­ed park­ing space for him on the ex­pen­sive streets of Man­hat­tan with a cop­per plaque carved with his name. But on that space Er­ic parked a worn Hon­da at least 10 years old, like hous­ing a beg­gar in a beau­ti­ful palace. Er­ic could’ve bought a new car with the mon­ey he earned on a day, why was he still dri­ving this old scruffy Hon­da? Mon­ey seemed to be most peo­ple’s mo­ti­va­tion, but Er­ic, rich as he was, wasn’t in it for the mon­ey. What’s mon­ey for then? What was he work­ing so hard for? What was he liv­ing for? He showed me that the wis­er a per­son is, the more s/he can be free of ma­te­r­i­al ties. The rich­ness of life is not de­fined by mon­ey, but by one’s in­ner world.

Jonathan Wang with Er­ic Kan­del on the day of his dis­ser­ta­tion de­fense. (1996)

Click on the im­age to see the full-sized ver­sion

I was lucky enough to be award­ed a schol­ar­ship from the Howard Hugh­es Med­ical In­sti­tute ($18,000 per year), which freed me from wait­ing ta­bles and work­ing food de­liv­ery as many for­eign stu­dents had to do. I felt se­cure enough fi­nan­cial­ly to watch a play on Broad­way.

Though the re­search went smooth­ly and I even­tu­al­ly pub­lished in Cell, I felt in­creas­ing­ly dispir­it­ed. My sub­ject was the func­tion of the CaMKII pro­tein in learn­ing and mem­o­ry. Study­ing its mech­a­nism was like dig­ging a very deep well, the deep­er I drilled, the fur­ther it was from re­al life. I start­ed to re­al­ize that pro­found ba­sic sci­ence re­search might not suit me well.

In­stead I dreamed to be like Er­ic, turn­ing sci­ence in­to prod­ucts, to lessen pa­tients’ ill­ness and pain, so I be­gan to spend lots of time on read­ing busi­ness news and books. Busi­ness bat­tle roy­als ex­cit­ed me like ac­tion film block­busters; mean­while my dream as a sci­en­tist fad­ed.

Yet the ra­tio­nal part of me kept say­ing that I should fo­cus on sci­en­tif­ic re­search, since this was the most sta­ble path — giv­en my en­vi­able back­ground in a No­bel lab, go­ing from doc­tor­ate to post-doc, as­sis­tant pro­fes­sor and pro­fes­sor was a sure path to suc­cess. It was as if I was liv­ing in a com­fort­able mar­riage that nonethe­less had no love; my heart and brain fought vo­cif­er­ous­ly. In such bat­tles, the brain usu­al­ly wins. A brain con­trolled by habits, lazi­ness and fear of the un­known can al­ways per­suade a ra­tio­nal per­son to give up their deep yearn­ing and trade their whole life’s hap­pi­ness for tem­po­rary se­cu­ri­ty. If the brain al­ways wins, the world would lose all their en­tre­pre­neurs and rev­o­lu­tion­ar­ies.

For­tu­nate­ly, my heart won. I de­cid­ed to go in­to busi­ness af­ter get­ting my doc­tor­ate de­gree. For a Chi­nese for­eign stu­dent with noth­ing, one of the most ef­fec­tive ways of switch­ing from sci­ence to busi­ness is to at­tend busi­ness school, so I de­cid­ed to get my MBA from Stan­ford. At that time I had a very vague in­ter­est in busi­ness and had no idea what terms like VC and PE — things that I’d even­tu­al­ly do — mean. I was like a moth that flies to a light seen from afar.

My ex­pe­ri­ence gave birth to my be­lief that one doesn’t have to know the des­ti­na­tion, but one must avoid dark­ness.

PC: Can you talk about your ex­pe­ri­ence at Stan­ford Busi­ness School?

JW: Stan­ford was very kind to me. They ex­empt­ed one year of my tu­ition and I paid the rest on loan. The school had an of­fice sup­port­ing low in­come stu­dents where they stored lots of sec­ond-hand bowls, plates and cook­ing ware that we could freely take. When I asked them when I had to re­turn them, they gave me a weird look: These things are old give­aways to start with, who would want them af­ter you’ve been through with them? I was sat­is­fied, pil­ing the stuff up in my arms like I was car­ry­ing gold.

Stan­ford’s cam­pus bor­ders Sand­hill Road, the “cap­i­tal” of the glob­al VC king­dom, so be­com­ing a VC was the dream of most of my class­mates. It took me a while to find out what VCs re­al­ly do, and I fan­ta­sized about try­ing it out, but that’s sim­ply a fan­ta­sy — not on­ly did I have ze­ro VC ex­pe­ri­ence, even my Eng­lish was “Chi­nese style.”

At a chance meet­ing with famed VC firm Del­phi Ven­tures, I ran in­to their youngest part­ner De­bra Yu — whose pic­ture I had seen on­line. I stopped her on the cor­ri­dor, stut­ter­ing through a self-in­tro­duc­tion. She im­me­di­ate­ly fig­ured that I was look­ing for a job. “We do not have a job,” she said di­rect­ly.

I blushed, but still pushed my­self to hand her a card with my con­tact in­for­ma­tion. I said I was a PhD and would be more than hap­py to vol­un­teer my time if they have any cas­es that are too “sci­en­tif­ic.” “We do not have such cas­es,” she quick­ly end­ed our con­ver­sa­tion.

But a few weeks lat­er, she ac­tu­al­ly called me and gave me the first case I ever read in my life. I un­der­stood none of it but didn’t dare telling her, so I pulled an all-nighter in the week­end and man­aged to put to­geth­er a re­port. Ei­ther the re­port ac­tu­al­ly helped, or she was too kind to put out my en­thu­si­asm, but to my sur­prise she gave me more cas­es.

I had four job of­fers up­on grad­u­a­tion. One of them from McK­in­sey, which was par­tic­u­lar­ly dif­fi­cult to ob­tain af­ter sev­er­al rounds of in­ter­views. An an­nu­al in­come  of $143,000 was tempt­ing for some­one with stu­dent loans and neg­a­tive as­sets. And that’s when life threw me an­oth­er prob­lem.

Deb­bie, ever so kind, left a mes­sage for me to say that even though her firm didn’t have an open po­si­tion, she gave me a re­fer­ral at Walden, a VC that was hir­ing. At that time Walden was the lead­ing VC in Asia. I got the of­fer, and re­al­ized the to­tal com­pen­sa­tion was 37% less than McK­in­sey.

My brain and heart be­gan an­oth­er round of fierce fights.

“Go to McK­in­sey,” the brain gave a clear or­der. “Com­pen­sa­tion aside, once you have McK­in­sey on your re­sume, your fu­ture ca­reer is se­cure.”

But my heart was mum­bling: “McK­in­sey sim­ply gives sug­ges­tions to com­pa­nies. You hand over the Pow­er­Point, take the con­sult­ing fees and you leave; the con­se­quences of those sug­ges­tions have noth­ing to do with you. What’s the point? Be­sides, you’re a young per­son with no busi­ness ex­pe­ri­ence. Who are you kid­ding in­struct­ing com­pa­ny ex­ecs with gray­ing hair? As a VC you get to build com­pa­nies with en­tre­pre­neurs, turn­ing sci­ence in­to prod­ucts like Er­ic did. That’s cool.”

“$143,000 in cash! On­ly an id­iot would pass that up,” the ra­tio­nal part of my brain said.

The dilem­ma was so ag­o­niz­ing I couldn’t sleep. En­tan­gled in my thoughts, I made a spread­sheet to an­a­lyze the pros and cons of each path, but no mat­ter how I looked at it, McK­in­sey had the up­per hand — on­ly a lu­natic would throw away 37% of in­come. But my brain could not over­pow­er my heart, and it even­tu­al­ly lost. I did what on­ly lu­natics would do: I went to Walden to be a VC.

In ret­ro­spect, I be­lieve my de­ci­sion was right. I was not suit­ed for McK­in­sey — I wouldn’t be hap­py there, nor could I sus­tain any pas­sion. But did I lose out on mon­ey? As it turned out, no. What I missed out on when I first start­ed work­ing, I gained back lat­er in life be­cause of my sus­tained pas­sion. That’s to say in life, there’s no “wast­ed” jour­neys. Knock, and the door will be opened to you.

I be­came good friends with Deb­bie, who brought me in­to the VC world. She is now the man­ag­ing di­rec­tor at Chi­nese Re­nais­sance and we of­ten work to­geth­er.

I now look back on my de­ci­sion with grat­i­tude: Fol­low your heart’s de­sire, don’t fight with it.

Changes in Chi­nese bio­phar­ma in­vest­ing: Mix of op­ti­mism and wor­ries

PC: Hav­ing in­vest­ed in the bio­phar­ma field for 20 years, you must have wit­nessed many changes?

JW: I en­tered the in­vest­ing in­dus­try in 1998. At that time Chi­na’s phar­ma­ceu­ti­cal mar­ket was on­ly 2% of the world. Very few multi­na­tion­al phar­ma­ceu­ti­cal com­pa­nies even con­sid­ered Chi­na. And do­mes­ti­cal­ly the sit­u­a­tion was bleak: There was a lack of tal­ent, void of in­no­v­a­tive abil­i­ties, lit­tle IP pro­tec­tion, and a mar­ket full of low qual­i­ty copy­cat drugs.

Af­ter 2000, the glob­al en­vi­ron­ment was tur­bu­lent too. The first gene se­quenc­ing project didn’t bring any rapid ad­vances in drug sci­ence or pro­duc­tiv­i­ty; rather, the cost of drug R&D shot up. The bio­phar­ma stock mar­ket popped with the dot­com bub­ble.

But with­in the next 20 years, Chi­na’s phar­ma­ceu­ti­cal mar­ket lift­ed off the ground — ris­ing all the way from 10-plus to just sec­ond to the US. Multi­na­tion­al phar­ma­ceu­ti­cal com­pa­nies fought to ex­pand their in­put in Chi­na. At the same time, the di­as­po­ra who have been liv­ing in for­eign coun­tries be­gan to join a big mi­gra­tion back to the moth­er­land. That very much ac­cel­er­at­ed the rise of Chi­na’s bio­phar­ma field.

In 2001, I co-found­ed Bay­He­lix — an or­ga­ni­za­tion for Chi­nese lead­ers in med­ical health — with Steve Yang. When we first start­ed out, al­most all our mem­bers lived over­seas. Now, the ma­jor­i­ty of them re­side in Chi­na, in­clud­ing Steve and I — we’ve been back for many years. Among Bay­He­lix mem­bers were the founder or ex­ec­u­tives of suc­cess­ful en­ter­pris­es like WuXi AppTec, Zai Lab, and BeiGene.

Front row from left: Jonathan Wang, Steve Yang. Back row from left: Guo­liang Yu, Vic­tor Shi. (2004)

Click on the im­age to see the full-sized ver­sion

I have a lot of faith for the fu­ture. The grow­ing econ­o­my, pop­u­la­tion ag­ing, ur­ban­iza­tion, im­prove­ment in the med­ical in­sur­ance sys­tem, up­grad­ed and next-gen prod­ucts — these mar­ket dri­ving fac­tors are all com­ing strong. The Na­tion­al Med­ical Prod­ucts Ad­min­is­tra­tion has ex­e­cut­ed ef­fec­tive re­forms that pushed do­mes­tic in­no­va­tion ca­pa­bil­i­ties to strength­en quick­ly; the gov­ern­ment is pro­vid­ing ro­bust sup­port to the in­dus­try on all lev­els, and it’s a great at­mos­phere for en­tre­pre­neur­ship; com­pa­nies like Zai Lab and BeiGene have reaped suc­cess­ful IPOs over­seas, demon­strat­ing ex­it strate­gies for in­no­v­a­tive com­pa­nies. Over­seas tal­ents are re­turn­ing and do­mes­tic tal­ents are ma­tur­ing.

PC: As bright as the fu­ture looks, do you have any wor­ries?

JW:  Lots of wor­ries. I’ll talk about a few that are im­por­tant in the near-term.

First of all I’m wor­ried whether the in­ten­si­ty of drug reg­u­la­to­ry re­forms can be sus­tained. The Na­tion­al Med­ical Prod­ucts As­so­ci­a­tion has im­ple­ment­ed dras­tic re­forms these two years, lead­ing to in­dus­try-wide pros­per­i­ty, but it’s just be­gin­ning. It’s bound to run in­to re­sis­tance from vest­ed in­ter­est in many dif­fer­ent forms. This takes per­sis­tent ef­fort to com­plete. Com­pe­tent re­form­ers must with­stand all sorts of pres­sure and temp­ta­tions — some­times even per­son­al risks — for the good of the coun­try and the peo­ple. They should be pro­tect­ed and en­cour­aged.

Sec­ond­ly I’m wor­ried about the po­ten­tial bar­ri­ers in tech­nol­o­gy, cap­i­tal and tal­ent (move­ment) caused by the US-Chi­na trade war. Dis­ease (and sav­ing pa­tients) is bor­der­less. Coun­tries work­ing with each oth­er to save peo­ple from death and ail­ments is some­thing ir­re­proach­able in eco­nom­ic, moral and eth­i­cal terms. I hope the trade war won’t cause ad­verse im­pacts on the bio­phar­ma in­dus­try, lead­ing to suf­fer­ings for pa­tients around the world.

The third is a some­what para­dox­i­cal wor­ry: I wor­ry that the mar­ket forms a bub­ble, and that the bub­ble bursts too quick­ly, form­ing an “an­ti-bub­ble.” Un­til two months ago, I was on­ly con­cerned about the bub­ble. The health­care in­dus­try has been so hot these years that in­vestors are stoked, but among them are peo­ple who don’t know the in­dus­try and are on­ly here to reap the wind­fall. Those peo­ple tend to win cas­es on com­pet­i­tive val­u­a­tions, which leads to bub­bles; but once the wind­fall dies down, they van­ish. That might cause what I call the “an­ti-bub­ble,” a bust that has gone on too long.

In the past two months, the bub­ble has gone down a bit., with many in wait-and-see mode. The bub­ble could be lift­ed again, or it could burst. Such ir­ra­tional boom and bust is not good for the in­dus­try.

Or­biMed is the largest bio­med­ical-fo­cused in­vest­ment firm. We cur­rent­ly man­age around $14 bil­lion in as­sets, with a port­fo­lio of around 500 com­pa­nies world­wide. Or­biMed Asia man­ages three funds fo­cused on pri­vate bio­med­ical in­vest­ments in Asia to­tal­ing $1.1 bil­lion. We’ve al­ready in­vest­ed in 50 com­pa­nies, in­clud­ing Zai Lab, Amoy Di­ag­nos­tics, AK Med­ical, Crown Bio­science, EOC Phar­ma, For­te­BIO, An­ge­lalign and Ge­newiz. Oth­er than that, Or­biMed’s sec­ondary mar­ket fund has close to $1 bil­lion of in­vest­ments in Asia.

PC: With so many wor­ries, you must be los­ing a lot of sleep?

JW: I sleep very well, thank you. None of these wor­ries I talked about are up to any in­di­vid­ual or com­pa­ny, so they are re­al­ly out of my hands. I could on­ly do my best in my own work.

Bub­ble or not, Or­biMed Asia will in­sist on our ground­ed, strict in­vest­ment strat­e­gy. We have three PE/VC funds with $1.1 bil­lion be­tween them. The third fund — with $550 mil­lion — launched last Sep­tem­ber and has al­ready booked $200-plus mil­lion in in­vest­ment.

In fact, Or­biMed Asia is rel­a­tive­ly com­fort­able this year. In the past year or so, we have had 10 com­pa­nies ex­it by ei­ther go­ing pub­lic or get­ting bought (in­clud­ing Zal Lab, Anoy Di­ag­nos­tics and AK Med­ical), with two more in the fi­nal stages of ex­it­ing. Adding them all up gives us a to­tal val­ue es­ti­mate of $500 mil­lion — sol­id cash re­turns to our LPs. That’s some stel­lar re­sults thanks to the hard work of the Or­biMed Asia team over the years.

PC: Hong Kong’s stock ex­change re­cent­ly added an IPO chan­nel for in­no­v­a­tive bio­phar­ma com­pa­nies, and you’re a mem­ber on their ad­vi­so­ry pan­el. What do you think of this new chan­nel?

JW: These thoughts are my per­son­al views, un­re­lat­ed to my po­si­tion on the pan­el.

The new IPO chan­nel at HKEX is def­i­nite­ly bet­ter than no chan­nel. We can think about it this way: It’s like we used to have to trav­el to the New York mar­ket to buy and sell fruits. While Hong Kong had a mar­ket, it used to on­ly trade veg­eta­bles and not fruits. Now that Hong Kong has a new fruit sec­tion, it’s ob­vi­ous­ly ben­e­fi­cial for both sides of the trade and the whole fruit in­dus­try.

I have full con­fi­dence in this new chan­nel. Chi­na is the sec­ond biggest phar­ma­ceu­ti­cal mar­ket in the world, and there are a num­ber of strong con­tenders lin­ing up to go pub­lic via the new chan­nel at HKEX. Chi­na’s bio­phar­ma in­no­va­tion is just bud­ding. The big wave of top glob­al tal­ent re­turn­ing to Chi­na is set to fa­cil­i­tate the birth of great com­pa­nies and rich pipelines. Many do­mes­tic en­tre­pre­neurs are hes­i­tant to go all the way to New York to sell their stock in Eng­lish. Hong Kong has the chance to be­come the Nas­daq of the east.

Many peo­ple are wor­ried about cer­tain com­pa­nies’ dis­ap­point­ing per­for­mance post-IPO. That’s quite un­nec­es­sary. Post-IPO per­for­mance is tied to a num­ber of fac­tors in­clud­ing IPO pric­ing, com­pa­ny re­sults and mar­ket con­di­tions. Volatil­i­ty in in­di­vid­ual stocks is not rep­re­sen­ta­tive of the whole stock mar­ket.

Plunges in cer­tain stocks made many in­vestors more ra­tio­nal and somber, which is good for the in­dus­try. Com­pared to two months ago, I am now more con­fi­dent of the new IPO chan­nel at the HKEX. The Or­biMed Asia team is in­vest­ing more ac­tive­ly.

The new biotech sec­tion of the HKEX is like a new­born. It’s im­pos­si­ble to guar­an­tee that it nev­er gets sick and is al­ways bliss­ful. No stock mar­ket would see all its stocks go up and nev­er come down. Even ma­ture mar­kets like the Nas­daq are not im­mune to volatil­i­ty. In fact it went through quite a down pe­ri­od two years ago, and it wasn’t un­til re­cent­ly that it climbed back to the lev­el we saw three years ago.

The biotech chap­ter is just be­gin­ning — akin to the first 30 sec­onds of a movie. It’s too ear­ly to make any con­clu­sions. None of the great­est movies we know start with a hap­py scene — it’s com­mon to see the pro­tag­o­nist fall 50 floors from a 100-storeyed sky­scraper. I be­lieve bril­liant plots are yet to come.

Fu­ture of en­tre­pre­neur­ship in Chi­na: Be dif­fer­ent, or die!

PC: What ad­vice do you have for en­tre­pre­neurs?

JW: First of all, I sug­gest that peo­ple on­ly do it when they are so pas­sion­ate about start­ing a busi­ness that they can hard­ly sleep. En­tre­pre­neur­ship is on­ly for a se­lect few; most suc­cess­ful and hon­or­able peo­ple don’t start busi­ness­es. So don’t ride on the en­tre­pre­neur­ial trend.

Many start busi­ness­es not out of pas­sion, but for ex­ter­nal rea­sons: It’s fash­ion­able to start a busi­ness now, it’s a good time to raise mon­ey, XYZ earned a lot of mon­ey in 18 months, et cetera. This is very dan­ger­ous. The prob­a­bil­i­ty of suc­cess for a ven­ture is nine to one. As Steve Jobs has said: “On­ly lu­natics would start their own busi­ness­es. Ra­tio­nal peo­ple would give up be­cause of the slim chances.” If you don’t have an in­her­ent, sus­tained pas­sion, once you run in­to ob­sta­cles you wouldn’t per­sist. The com­pa­ny would be­come, in ef­fect, an off-plan prop­er­ty that goes de­funct.

Sec­ond­ly, I sug­gest that en­tre­pre­neurs mea­sure time in five-year in­cre­ments. It would be a mir­a­cle for a per­son to build a great com­pa­ny from scratch in five years. It’s rare to have a great com­pa­ny even in 20 years. But Chi­nese cul­ture is ob­sessed with “short, flat, fast.” So many en­tre­pre­neurs are des­per­ate to build a great com­pa­ny in 18 months — and the “dumb mon­ey” on the mar­ket are cheer­ing their rest­less­ness on.

Fur­ther­more, I sug­gest that founders pay more at­ten­tion to build­ing a team. An en­tre­pre­neur’s in­stinct tends to be get up and go. That’s nec­es­sary to start, but it’s not a long-term strat­e­gy. No­body can build a great com­pa­ny by him or her­self. If Liu Bei (who found­ed Shu King­dom in the Three King­doms pe­ri­od) had not found his team but had wield­ed his sword alone to bat­tle, there would prob­a­bly be no Shu. In the process of build­ing a busi­ness, the en­tre­pre­neur must quick­ly piv­ot from be­ing a work­er to a leader and man­ag­er. Many en­tre­pre­neurs don’t re­al­ize that.

Last­ly, I want to leave these words for en­tre­pre­neurs: Be dif­fer­ent, or die! On the first day of start­ing your busi­ness you should con­sid­er dif­fer­en­ti­a­tion, build your unique mar­ket po­si­tion and avoid fierce com­pe­ti­tion. Chi­nese com­pa­nies like to com­pete with sim­i­lar en­ti­ties — just look at the tens of PD-1/PD-L1 and CAR-T as­sets. In this re­gard Chi­na should learn from Switzer­land. When the Swiss sells you a fruit knife they brand it as “Swiss army knife.” Even if you don’t cut fruit with it, there’s the glo­ry as­so­ci­at­ed with car­ry­ing it. Most Chi­nese com­pa­nies on­ly know to com­pete by slash­ing prices. Their fruit knives get cheap­er and sharp­er than ever, but they ul­ti­mate­ly fall in­to the “low-qual­i­ty, low-price” trope. Not on­ly do they end up with poor prices — no­body takes pride in it.

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Biogen CEO Michel Vounatsos (via Getty Images)

With ad­u­canum­ab caught on a cliff, Bio­gen’s Michel Vounatsos bets bil­lions on an­oth­er high-risk neu­ro play

With its FDA pitch on the Alzheimer’s drug aducanumab hanging perilously close to disaster, Biogen is rolling the dice on a $3.1 billion deal that brings in commercial rights to one of the other spotlight neuro drugs in late-stage development — after it already failed its first Phase III.

The big biotech has turned to Sage Therapeutics for its latest deal, close to a year after the crushing failure of Sage-217, now dubbed zuranolone, in the MOUNTAIN study.

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Pascal Soriot (AP Images)

As­traZeneca, Ox­ford on the de­fen­sive as skep­tics dis­miss 70% av­er­age ef­fi­ca­cy for Covid-19 vac­cine

On the third straight Monday that the world wakes up to positive vaccine news, AstraZeneca and Oxford are declaring a new Phase III milestone in the fight against the pandemic. Not everyone is convinced they will play a big part, though.

With an average efficacy of 70%, the headline number struck analysts as less impressive than the 95% and 94.5% protection that Pfizer/BioNTech and Moderna have boasted in the past two weeks, respectively. But the British partners say they have several other bright spots going for their candidate. One of the two dosing regimens tested in Phase III showed a better profile, bringing efficacy up to 90%; the adenovirus vector-based vaccine requires minimal refrigeration, which may mean easier distribution; and AstraZeneca has pledged to sell it at a fraction of the price that the other two vaccine developers are charging.

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Jason Kelly, Ginkgo Bioworks CEO (Kyle Grillot/Bloomberg via Getty Images)

Af­ter Ko­dak de­ba­cle, US lends $1.1B to a syn­thet­ic bi­ol­o­gy com­pa­ny and their big Covid-19, mR­NA plans

In mid-August, as Kodak’s $765 million government-backed push into drug manufacturing slowly fell apart in national headlines, Ginkgo Bioworks CEO Jason Kelly got a message from his company’s government liaison: HHS wanted to know if they, too, might want a loan.

The government’s decision to lend Kodak three quarters of a billion dollars raised eyebrows because Kodak had never made drugs before. But Ginkgo, while not a manufacturing company, had spent the last decade refining new ways to produce materials inside cells and building automated facilities across Boston.

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Chi­na opens the door for biotech in­vestors in Hong Kong to buy Shang­hai stocks, and vice ver­sa

When Shanghai’s STAR board began opening its doors to biotech, it was considered not just a rival to Nasdaq but also the stock exchange in Hong Kong. Those perceptions may take an amicable turn as China expands a mutual access program with the city.

The changes mean investors in mainland China will be able to own Hong Kong biotech chapter stocks, while those in Hong Kong — a much more internationally connected group — would have access to those listed on STAR. In effect, it turns the Shanghai market into a globally accessible exchange overnight while also broadening a key source of revenue for HKEX.

Frank Zhang (AP Images)

Plot thick­ens around Leg­end Biotech, Gen­Script with founder Frank Zhang's ar­rest

Two months after Legend Biotech made the startling disclosure that founder and then-CEO Frank Zhang was placed under “residential surveillance,” its parent company revealed that he’s been formally arrested.

Zhang — who, since founding GenScript 18 years ago, has taken the CRO public and groomed Legend Biotech in-house until the J&J-partnered CAR-T player was mature enough for its own Nasdaq listing — is severing his final ties with both. He is resigning as board chair/non-executive director of GenScript and director of Legend.

The ad­u­canum­ab co­nun­drum: The PhI­II failed a clear reg­u­la­to­ry stan­dard, but no one is cer­tain what that means any­more at the FDA

Eighteen days ago, virtually all of the outside experts on an FDA adcomm got together to mug the agency’s Billy Dunn and the Biogen team when they presented their upbeat assessment on aducanumab. But here we are, more than 2 weeks later, and the ongoing debate over that Alzheimer’s drug’s fate continues unabated.

Instead of simply ruling out any chance of an approval, the logical conclusion based on what we heard during that session, a series of questionable approvals that preceded the controversy over the agency’s recent EUA decisions has come back to haunt the FDA, where the power of precedent is leaving an opening some experts believe can still be exploited by the big biotech.

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John Maraganore, Alnylam CEO (Scott Eisen/Bloomberg via Getty Images)

UP­DAT­ED: Al­ny­lam gets the green light from the FDA for drug #3 — and CEO John Maraganore is ready to roll

Score another early win at the FDA for Alnylam.

The FDA put out word today that the agency has approved its third drug, lumasiran, for primary hyperoxaluria type 1, better known as PH1. The news comes just 4 days after the European Commission took the lead in offering a green light.

An ultra rare genetic condition, Alnylam CEO John Maraganore says there are only some 1,000 to 1,700 patients in the US and Europe at any particular point. The patients, mostly kids, suffer from an overproduction of oxalate in the liver that spurs the development of kidney stones, right through to end stage kidney disease.

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Bob Nelsen (Photo by Michael Kovac/Getty Images)

Bob Nelsen rais­es $800M and re­cruits a star-stud­ded board to build the 'Fox­con­n' of biotech

Bob Nelsen spent his pandemic spring in his Seattle home, talking on the phone with Luciana Borio, the scientist who used to run pandemic preparedness on the National Security Council, and fuming with her about the dire state of American manufacturing.

Companies were rushing to develop vaccines and antibodies for the new virus, but even if they succeeded, there was no immediate supply chain or infrastructure to mass-produce them in a way that could make a dent in the outbreak.

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FDA hands Liq­uidia and Re­vance a CRL and de­fer­ral, re­spec­tive­ly, as Covid-19 cre­ates in­spec­tion chal­lenge

Two biotechs said they got turned away by the FDA on Wednesday, in part due to pandemic-related travel restrictions.

North Carolina-based Liquidia Technologies was handed a CRL for its lead pulmonary arterial hypertension drug, citing the need for more CMC data and on-site pre-approval inspections, which the FDA hasn’t been able to conduct due to travel restrictions. The agency also deferred its decision on Revance Therapeutics’ BLA for its frown line treatment, because it needs to inspect the company’s northern California manufacturing facility. The action, Revance emphasized, was not a CRL.